
Weโve seen it all before: the maniacal look in television commentatorsโ eyes, the nonstop blogging and tweeting. All signs point to mass hysteria that can only mean one thing: a bubble is inflating to gigantic proportions and could burst any day. โThis time is different,โ everyone says. Level-headed commentators try to preach caution but get left in the dust. Then it all comes crashing down.
Iโm talking, of course, about the bubble in comparing Bitcoin and other cryptocurrencies to the Dutch tulip bubble. This โmetaโtulip bubble,โ or โtulip-mania maniaโ has gotten out of hand. There was J.P. Morgan CEO Jamie Dimon in September saying Bitcoin was โworse than tulip bulbs.โ By early December, all the major media outlets were making the comparison. But I really knew this wouldnโt end well when my shoeshine boyโs barberโs brother-in-lawโs cellmate bet his life savings that cryptocurrencies would turn out just like those flowers. Now, a Google search of โbitcoin tulipโ yields about 467,000 results.
As the story goes, in 1637, the price of tulip bulbsโฆ You know what, it doesnโt matter. The price of something went up by a lot and then went down. Thatโs all most of the commentators making the comparison know. You see, one person makes a reference thatโs pertinent to economic history, and they sound smart. Their stock rises, so the next person does it. Soon, thereโs nothing of real value behind the reference at all. People are comparing Bitcoin to tulips just because the last person did itโPonzi commentating at its worst.
So why do these bubbles happen, again and again? Some blame Wall Streetโcommentator greed: the purely speculative value of wanting everyone to think youโre smart. They want the government to step in with regulations that will stop comparisons like the tulip-mania mania from becoming โtoo trite to fail.โ But the real culprit is the government itself. Its inflationary monetary policy has caused entrepreneurs to overestimate the demand for economic commentators, enabling the existence of too many commentators with too little to say. When the tulip-bubble bubble bursts, we risk the resulting correction spilling over into the economic-commentating sector as a whole, forcing even those of us with no culpability in the bubble to go out and get real jobs. Terrifying, I know.
We donโt know when the tulip-bubble bubble will burst. We only know it inevitably will. When it does, the damage could be even greater than the Japanese real estate bubble of the 1990s, dotcom stocks, or even the Dutch tulipโฆ Oh my God, itโs worse than I thought.
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